Over the past couple of months, Netflix has gone from being a tech darling to, well, something else entirely. Their latest move has the entertainment industry and Wall Street doing a lot of head scratching.
In an e-mail sent to Netflix subscribers on Monday, CEO Reed Hastings said the company is renaming its DVD rental business “Qwikster” and the Netflix name will only be used for its online-streaming service. The move will also split Netflix and Qwikster into two separate Web sites, with separate access and billing procedures.
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Under the company’s latest plan, customers will no longer have their lists of DVD and streaming videos integrated into a single queue; instead they will have to go to the different Web sites to manage their videos.
For Netflix users, and I am a former one who canceled after the company split streaming and DVDs into separate services to hike up the price, this makes no sense. Netflix’s greatest strength isn’t and never was the size or currency of its catalog. Netflix was always a little bit behind RedBox and brick and mortar DVD rental stores in release dates, but they made up for that in a big way with the integration of streaming and mail, and in their ability to suggest titles based on your previous rentals and streaming choices. Netflix made the whole process of renting or streaming movies about as painless and cheap as it could be. You could stream to your AppleTV, your phone, your computer, your gaming system, etc and track DVD rentals in one go — movies, documentaries, TV shows, you name it. That service demands integrating, not segregating, streaming and DVD rentals for as long as physical media remain viable. By spinning out Qwikster and separating their web sites, Netflix has ripped the heart out of their company’s greatest strength.
Streaming is the future; DVDs and even Blu-Ray are rapidly becoming the past. Netflix has that part right. But they’re going about getting to the future in the wrong way, and it may well kill a once great company.
Update: The Qwikster decision could really have benefited from some online research. The name already exists on Twitter, and isn’t what you’d call a good corporate citizen.
My wife and I prefer the non-streaming since it gives us access to the enormous stock of classics, documentaries, etc. Anybody who sticks to streaming will miss the really deep bench that ‘Flix has.
Or…. is netflix breaking the 2 income streams in order to sell off the dvd-in-the-mail venue because they see the numbers going with streaming?
Agree w/ Charlie. NexFlix sees the future and is trying to spin off the plastic discs w/ all its inventory and shipping hassles. Though I agree w/ the article, if there was a more ham handed way of doing it, I’ve no idea what that would be.
But then I’ve always been streaming only so none of this affects me.
I stream only, and the hard copy (Qwikster) side of the business will eventually die anyway.
As for the price hikes everyone got so worked up about, it’s still far cheaper than cable – and I get to watch what I want when I want to watch it. I’m still extremely happy with my subscription even though it costs me a couple of extra bucks a month.
I’m not sure cable will ever die, but they had better hope someone like Netflix doesn’t start producing their own series of shows or that one of the net shows already in production doesn’t take off in a big way.
The problem with the Netflix streaming service is that it doesn’t provide adequate value for the money compared with the DVD service. The streaming catalog is about ten percent the size of the DVD catalog. Streaming doesn’t include DVD extras like commentary tracks, and also there aren’t as many titles available. There are some frequent technical problems with streaming such as too-soft volume, and did I mention that the catalog size for streaming is pathetically small compared to the size of the DVD catalog? One big benefit of streaming is instant gratification, but if I search for a movie I want to watch, it’s usually not available to stream – just as a DVD. I can find *something*… but I can find something on Amazon too, and I get that free with Prime.
People keep saying that the future is in streaming, but just looking at what’s available it’s hard to say that that’s true. When streaming was an add-on to the DVD subscription, either free (as at first) or for a few bucks, it was a great extra. But until they build up the size of the streaming catalog (have I mentioned that yet?), it’s not something I want to pay money for.
I had more or less decided to drop streaming and go to DVD-only, but it doesn’t exactly sound like Netflix is committed to that business any more, to the extent that anyone can tell what exactly they’re thinking. If they’re thinking. I might drop it completely at this point.
IMO, the movies Hollywood puts out these days are garbage anyway. I like the streaming for TV series like the Twilight Zone, Star Trek, Lost, the Sherlock Holmes series with Jeremy Brett, and lots more I haven’t even gotten to yet. There is so many titles in my Instant Queue, I can’t watch them all – and none of them are movies.
My daughter is happy with streaming, as well. After doing her homework, she’ll watch an episode of one of the Disney shows while Mom makes dinner (if she isn’t outside playing).
I think it’s worth the money – and it has made me contemplate giving up cable. If it weren’t for football, I probably would.
Speaking as a long time and still current Netflix customer all I can say is, it was fun while it lasted! I had a really good time, and being a loyal kind of guy I’ll stick around for a while.
Too bad your management went nuts.
What a boneheaded move. Yes the DVD by mail part of the business will be going away but not for a few years. The splitting to sell theory may sound great, to some people, but who in their right mind would pay for all those disks, people and warehouses when even my mother knows the demand will be dropping as the technology gets better.
However, due to the slow migration of both current hit films and older classics from DVD to streaming format, there are probably just 3 to 5 years remaining on the hardcopy business model. So why would Netflix mess with a good thing? I have no idea. And I am sure they wish they could go back 6 months and start all over again, but in business there are no do overs or reset button.
Not all of us have the kind of broadband speed to handle efficient streaming. (I have only 3 Mb DSL.) So to get the DVD extras, the multi-channel sound, and the higher resolution of BluRay, I have to go with disks.
Something most people have yet to realize: All internet providers are NOW trying to get a law passed that will block how much internet use that you can have! For instance, my “cap” is 45gb a month! I am using well over 400gb. My bill was already increased $10! They switched me to a higher priced plan! I checked the agreement that I signed when I enrolled and it was there in black and white. The new law will allow them to TURN OFF your internet service for the rest of the month once your cap is reached!
I have found a couple PERKS with using the PS3 for online streaming! “the WB” station streams perfectly through the PS3 web browser! No cut outs or glitches! 100′s of series. Also, playon(ps3 online streaming) has a 14 day free trial. It gives your PS3 dirrect access to all the big stations cbs,nbc, syfy, ect Quality is lacking but its a good free alternative for a couple weeks! Online streaming will NEVER be the future unless netflix starts their own internet company!
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